China housing market disappoints in September
New home sales across 10 major cities tracked by SCMP-Creda index hardly gained, while prices fell in Shanghai, Shenzhen and Guangzhou last month
New home sales in mainland China’s major cities failed to live up to expectations and prices fell in three of the four tier-1 cities, according to the latest SCMP-Creda index, putting on more pressure for developers to increase their destocking efforts.
Primary home prices fell respectively by 5.6 per cent in Guangzhou, 3.5 per cent in Shenzhen and 0.9 per cent in Shanghai last month from August. But they gained in the remaining seven cities, led by a 7.1 per cent jump in Beijing, the highest pace of monthly increase in the capital city since March.
People who expected a traditional “golden September” would be disappointed at the meagre 1.4 per cent increase in sales during the period in the 10 major cities, as a 26.2 per cent slump in Beijing and 24.4 per cent dive in Shenzhen dragged on gains in the remaining eight cities.
The flattish sales number came despite a surge in new home supply to this year’s highest levels in some cities as developers beefed up efforts to hit their annual targets.
“The worse-than-expected September performance will increase pressure on most developers,” said Chen Sheng, dean of the China Real Estate Data Academy, partner of the South China Morning Post for the monthly index.
“The fourth quarter will be their last chance and developers will surely increase supply and take more diversified and active steps to speed up destocking and increase sales revenues,” he added.
China’s official data showed on Monday that property sales, in terms of floor space, including offices, retail and residential, rose 7.5 per cent in the first three quarters from a year earlier, up from an annual rise of 7.2 per cent in the first eight months.
The SCMP-Creda index showed primary home sales rose 30.2 per cent in the 10 major cities last month from a year earlier, led by a 133.1 per cent spike in Nanjing, 97.5 per cent jump in Guangzhou and 90.4 per cent increase in Tianjin. Chongqing was the only city to suffer a fall, of 37.1 per cent during the period.
In terms of prices, Shenzhen far outpaced others with a jump of 60.2 per cent last month from a year earlier to 36,710 yuan per square metre, the highest in China and more than five times the level in Chongqing, the cheapest among the 10 cities tracked by the SCMP-Creda index, which also includes Chengdu, Hangzhou, Nanjing and Wuhan.
However, the pace still marked a slowdown from August’s annual price increase of 65.5 per cent in Shenzhen.
Its neighbour Guangzhou suffered a decline of 3.5 per cent in new home prices last month from a year earlier. The other city that saw a year-on-year fall was Chongqing.
Although ranked as one of the four tier-1 cities, Guangzhou’s average new home price of 14,817 yuan per square metre last month kept it more at levels of tier-2 cities, such as 15,248 yuan per square metre in Hangzhou and 15,901 yuan per square metre in Nanjing.